The welfare reform legislation of 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) is transforming the welfare system from an income-dispensing program to an employment program. Under the new law, states have been given wide latitude in designing and implementing state welfare policies and have responded differently in work discipline and maternalism. This proposed research examines the consequences of welfare reform, both in terms of state variation and in terms of the overall structural shift of welfare policy under the law, for adolescents and young adults. The first phase (years 1-3) of the proposed research focuses on a cohort of youth who enter adolescence after PRWORA. The investigators will examine the effects of state variation under PRWORA on adolescent and young adult outcomes in (1) high school completion, (2) formal employment, (3) first out-of-wedlock childbearing, and (4) first welfare participation. Controlling for family, peer and local economy effects, we test the effects of work discipline and maternalism of bundled state policies. Data from the NLSY97, a nationally representative sample, will be matched with the state policy data from the public-use database from Assessing the New Federalism of the Urban Institute. Event history analysis of multiple events and reciprocal causation will be performed. Multi-level analysis will be used to yield more precise estimates of the state-level policy effects. The second phase (years 4-5) focuses on a comparison between the NLSY97 and an earlier cohort, NLSY Young Adults who were children of the NLSY79 women respondents. The investigators will examine the effects of the overall structural shift of welfare policy by comparing the outcomes of two cohorts experiencing transition to adulthood before and after the welfare structural shift. Using the most recent development in the literature on selection bias in non-randomized data, they propose a design to make the two cohorts comparable and a method to obtain unbiased estimates of the overall welfare reform effects.